Scoop: Digital Chocolate Reaching Out to VC Investors

Zynga’s not for everyone. There are plenty of VCs out there with less than a quarter-billion to gamble. Some of them will do well to look into Digital Chocolate, which is reaching out to new potential investors for its Series D fundraising, sources at multiple VC firms told peHUB.

Combined, the A, B, and C rounds of the San Mateo, Calif.-based company have netted roughly $44 million (less than one-tenth the haul Zynga has raised, never mind its reported $250 million ongoing fundraising effort). Should Digital Chocolate succeed in its attempt, it’s safe to say its aggregate funding will at least exceed $60 million once its Series D is complete.

The company’s had some bad breaks along the way. Last year, Digital Chocolate filed a lawsuit against Zynga over the Mafia Wars title, which the former alleged it coined first. Digital Chocolate’s Mafia Wars was a little-known game used on cell phones, unlike Zynga’s Mafia Wars, which became dominant with online gamers and in part propelled Zynga to its valuation, reportedly as high as $9 billion. On its way to social gaming dominance on Facebook, Zynga rapped the suit as “opportunistic” in a statement.

Digital Chocolate has developed a number of phone-based games since its 2003 inception, but it also has a growing presence on Facebook, which will soon establish a gaming credits system aimed at keeping participants engaged and make credit payments quick enough that a break from play is not required. With a robust and growing lineup of games, even second place to Zynga would represent a coup. Among Digital Chocolate’s titles are Ninjas Rising, Card Rivals (not a far cry from Zynga’s dominant Texas Hold ‘em game), MMA Pro Fighter, Vegas City, Hollywood City and Millionaire City (again, not unlike Zynga’s CityVille).

The company’s prior investors include Chengwei Ventures, Kleiner Perkins Caufield & Byers, Sequoia Capital, Sutter Hill Ventures, Bridgescale Partners, and Outlook Ventures. Sequoia and Bob Pittman, the creator of MTV, participated in Digital Chocolate’s earliest rounds. Digital Chocolate was founded in 2003 by Trip Hawkins, also the founder of gaming titan Electronic Arts.

Digital Chocolate did not respond to requests for comment.